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The volume of daily trades at online brokers E*Trade and Ameritrade fell last month in a further sign that the USâs online retail broking industry has been hit by lacklustre equity markets.

The trend is bad news for E*E*Trade, which this month expressed an interest in buying its rival Ameritrade to capture a larger share of the online retail trading business.

E*Trade’s daily average revenue-producing trades (Darts) fell 8.9% in April compared with the previous month, and levels have been falling every month this year. Darts in April totalled 115,000; in March they were 126,000; in February 135,000; and in January 143,000.

Ameritrade also saw a slump in online retail trading, prompting the company to scale back its earnings target for its financial year, which ends in September.

Charles Schwab, an online broker and possible rival bidder for Ameritrade, saw trading volumes fall by 6% in April against the previous month. However, days after E*Trade announced its intentions for Ameritrade, the target’s directors said the Nebraska-based company was not for sale.

A merger would have combined two of the largest players in online trading to create a rival to market leader Charles Schwab.

Joe Moglia, Ameritrade’s chief executive, said: “With seven M&A transactions in the past four years, we are a leader in consolidating this industry. We will continue to explore strategic opportunities, basing our decisions on whether a transaction will enhance shareholder value and benefit our clients.”

E*Trade said in a statement it offered Ameritrade shareholders 47.5% of a combined company, plus $1.5bn (€1.2bn) in cash.

E*Trade said it expected the deal to generate $650m in revenue benefits and cost savings. Analysts said it was too soon to speculate whether a merger was likely but said that a combined entity could be valued at $12bn to $14bn, taking into account savings that could result from such a deal.